You are not a charity, and your shop is not a hobby fund.
Why This Matters
I see makers do this constantly. They charge $25 for something that took three hours to make, used $12 in material, and required a $15,000 laser to produce. Then they wonder why the shop never pays for itself.
You need to set real goals and actual quotas. Not what other makers “allow” or “accept” in their Facebook groups. Not what someone on Etsy is willing to race to the bottom for. What you need to earn per hour to make this worth your time.
I learned this the hard way. I used to check what other people charged and then price just under them. I thought that would get me more sales. It got me more work for less money. Then I sat down and did the math on what I was actually making per hour. It was $11. I could have worked at the hardware store for more and gotten health insurance.
Your pricing should reflect your costs, your time, and the value you create. If someone else wants to lose money on every sale, let them. You are building a business.
Steps
- Track your actual shop time per project. Use a timer or write it down. Include design time, setup, test cuts, production, finishing, packing, and dealing with customer questions. Most makers forget half of this.
- Calculate material cost with waste. You are not getting 100% yield from a sheet of plywood or acrylic. Add 10% to 20% to your material cost to cover test pieces, mistakes, and offcuts you cannot use.
- Add overhead per hour. Divide your monthly shop costs by the hours you can actually work. Include rent, power, consumables like lenses and nozzles, air compressor maintenance, software subscriptions, and insurance. For me, that overhead is about $18 per billable hour.
- Set your hourly rate. Decide what your time is worth. Not what you hope it might be worth someday. What it needs to be worth right now to pay your bills and make this sustainable. I use $50 per hour for custom work and $35 per hour for production runs.
- Build your formula. Time times hourly rate plus material cost plus overhead equals your base price. Then add 20% to 30% margin on top. That margin is your profit and your buffer for the jobs that take longer than expected.
- Set monthly revenue goals. Pick a number you need to hit. Then divide by your average sale price to get the number of orders you need. If the math does not work, your prices are too low or your product takes too long to make.
- Ignore what other makers charge. Seriously. You do not know their costs, their quality, their customer base, or whether they are even making money. Price for your business, not theirs.
Common Mistakes
- Forgetting to include design time or customer communication time in your labor calculation
- Using retail material pricing instead of what you actually paid after shipping and tax
- Assuming 40 billable hours per week when you realistically get 20 to 25 after admin and maintenance
- Charging the same rate for a custom one-off as you do for a production run of 50
- Dropping your price the second someone says it is too expensive
- Comparing your work to mass-produced imports that were made in factories for pennies
- Not raising prices when your costs go up or your skills improve
What I Do in My Shop
I track every job on a simple spreadsheet. Time in, time out, material used, what I charged. At the end of each month I look at my hourly average. If it is under $40, I know I either took jobs that were too cheap or I am being too slow on production.
Last year I had a customer want 100 wooden coasters with custom engraving. She saw similar ones on Etsy for $3 each. I did the math. Each coaster took 4 minutes of laser time, 2 minutes of sanding and finishing, plus material cost of about $0.80. That is 6 minutes per piece, which is 10 hours total, plus $80 in wood. At my rate that job should have been $580 minimum. I quoted $650. She said no and bought from Etsy.
Two months later she came back. The Etsy order was garbage. Half of them arrived broken and the engraving was barely visible. She paid my price. I delivered quality. She has ordered three more times since then and refers people to me.
Your skill should not mean a discount. It should mean a premium.
Local Markets vs Etsy
Local markets let you charge more because people see the quality in person and you do not have to compete with every maker in the country. But your volume is limited. You can only sell what fits in your booth and what people buy that day.
Etsy gives you reach but puts you in a race to the bottom. Every search result is sorted by price unless the customer filters differently. If you are selling the same thing as 50 other shops, you will feel pressure to drop your price. Do not. Either make something different or accept that Etsy is not your best channel.
I use local markets for higher-margin custom work and in-person relationships. I use my own website for repeat customers and wholesale orders. I barely touch Etsy anymore because I got tired of fighting the algorithm and the lowballers.
Next Step
Pull your last ten sales and calculate what you actually made per hour on each one. Include everything. If the number is under $25, your prices are too low. Raise them by 30% on your next batch and see what happens. You will lose some sales. You will make more money.